Project Work
Project Work
Project Work
There is still lack of awareness about its various issues, like, quality and frequency
of financial and managerial disclosure, compliance with the code of best practice,
roles and responsibilities of Board of Directories, shareholders rights, etc. There
have been many instances of failure and scams in the corporate sector, like
collusion between companies and their accounting firms, presence of weak or
ineffective internal audits, lack of required skills by managers, lack of proper
disclosures, non-compliance with standards, etc. As a result, both management
and auditors have come under greater scrutiny.
2. No Government Support
The public over the recent scandals has made it clear that the status quo is no
longer acceptable: the public is demanding accountability and responsibility in
corporate behavior. It is widely believed that it will take more than just
leadership by the corporate sector to restore public confidence in our capital
markets and ensure their ongoing vitality.
3. Insider Trading
Corporate insiders like officers, directors and employees by the virtue of their
position have access to confidential information about the corporation and may
misappropriate that information to reap profits.
However, the term is frequently used to refer to a practice in which an insider or a
related party trades based on material non-public information obtained during the
performance of the insider’s duties at the corporation, or otherwise in breach of
a fiduciary or other relationship of trust and confidence or where the non-public
information was misappropriated from the company.
The problem in the Indian corporate sector is that of disciplining the dominant
shareholder and protecting the minority shareholders. Clearly, the problem of
corporate governance abuses by the dominant shareholder can be solved only by
forces outside the company itself. In an environment in which ownership and
management have become widely separated, the owners are unable to exercise
effective control over the management or the Board.
4. FAMILY OWNED BUSINESS
1. Noncompliance with disclosure norms and even the failure of auditor’s reports to conform to
the law attract nominal fines with hardly any punitive action.
2. One of the big problems with Indian corporate governance is that too many listed companies
and directors follow the letter of the law, rather than the spirit. Clause 49 of the country’s listing
rules sets out a series of corporate governance regulations. For example, a listed company must
have a non-executive and one-third of its board should be non-executive directors. The
nonexecutives should be on the board to challenge management, but in reality they tend not to.
IF MANAGEMENT IS ABOUT RUNNING
THE BUSINESS , CORPORATE
GOVERANCE IS ABOUT SEEING THAT IT
IS RUN PROPERLY
THE MANAGEMENT OF THE COMPANY HENCE ASSUMES THE ROLE OF THE TRUSTEE
FOR ALL THE OTHER.
YOU CAN FOOL THE PEOPLE SOME OF THE TIME, AND SOME OF THE PEOPLE ALL THE
TIME, BUT YOU CANNOT FOOL ALL THE PEOPLE ALL THE TIME.